Supermarket giant Tesco delists Hovis bread lines

22 October, 2010

Page 4

by Sylvia Macdonald

In an unprecedented move, Tesco has delisted approximately 11 Hovis breads. According to British Baker sources, the retailer refused to accept a price increase from the baker, leaving Hovis with no choice but to walk away.

The disagreement with Hovis Bread Bakeries began just over two weeks ago, when the baker sought a price rise. This followed a much-publicised increase in the price of wheat, which has had implications throughout the flour milling and baking trade worldwide.

Other retailers have broadly accepted the need for a price rise in both flour and bread.

Meanwhile, the Tesco helpline and Hovis Customer Care line are both having to field questions about the non-availabilityof some of the nation's best-selling breads, with Hovis accounting for a branded bread volume market share of nearly 25%.

Customer service at Tesco's Hackney store in London said it was only stocking two Hovis lines medium and thick white and wholemeal instead of the usual range. "We have cancelled Hovis because we have brought in other lines," said a customer service representative.

At Newport and Cardiff, Wales, the stores had full deliveries of Hovis Soft White and Best of Both, but wholemeal and Granary loaves were among those not being stocked.

Hovis Bread Bakeries and flour miller Rank Hovis are part of Premier Foods, which also owns brands such Mr Kipling, Hartley Jams and Branston pickles.

Earlier in 2010, Hovis announced a conversion of all its branded bread to 100% British wheat to support UK farming.

In August Premier's six-month financial report showed Hovis branded sales were up 1.1%, while non-branded were down by 26% (six months to 26 June 2010).

Branded bakery sales in the Hovis division increased by £2m to £183m compared to the first six months of 2009, but retailer brand bakery sales fell by more than a quarter from £100m to £74m, which the firm put down to consumers trading-up to branded products.